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SEC Weighs
A 'Big Three' World

Officials Discuss Steps to Take if KPMG
Or Another Large Accounting Firm Fails

By

Deborah Solomon and

Diya Gullapalli Staff Reporters of THE WALL STREET JOURNAL

Updated June 22, 2005 12:01 a.m. ET

Securities and Exchange Commission officials are privately discussing steps to take in the event of a collapse of one of the Big Four accounting firms, including temporarily relaxing some rules they put in place two years ago to try to improve the quality of audits.

The conversations, which began after the demise of Arthur Andersen LLP three years ago, have taken on increased urgency in the wake of news that the Justice Department is debating whether to indict KPMG LLP for peddling allegedly illegal tax shelters. Should a...